What credit score is needed for a personal loan?

11 February 2019

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How those three digits can affect your options.

Your credit score is one of the most important factors in a personal loan application. Lenders often won’t consider you if you don’t meet their minimum credit requirement. However, it’s not the only feature they look at.

What credit score do I need to get a personal loan?

Typically, you need a credit score of at least 550 to get a personal loan. However, you usually have more options if you have a credit score of 640 or higher.

Minimum credit score to qualify with top online providers

Generally, lenders that fund loans directly require good credit — especially banks, though credit unions and online lenders might be more relaxed. Peer-to-peer lenders, which connect borrowers with investor funding, also typically require higher credit scores. If your credit score is below 640, you might have an easier time finding lenders if you use a connection service.

What credit score do I need to get a competitive deal?

Generally, you need to have excellent credit to get the lowest rates and largest loan amounts that a lender offers. However, you can often get a favorable deal even if your credit score is considered good.

While lenders might have their own criteria for what qualifies as good or excellent credit, it’s usually around this range:

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How do I check my credit score?

You can use one of the following services or methods to check your credit score. Typically, the score you receive is based on a soft credit inquiry, which doesn’t affect your credit rating but isn’t as accurate as a hard credit pull. Some lenders warn that soft credit inquiries give higher scores than hard credit checks.

Online services. Sites like Credit Sesame allow anyone to check their credit score by filling out a quick online form with basic personal information like your name and birth date, as well as your Social Security number.

Credit history. In addition to your credit score, many lenders look at the length of your credit history. If it’s still relatively new — say, less than three years old — you might have trouble qualifying.

Compare loan options for different credit score ranges

Bottom line

You can get a personal loan with almost any credit score — or even no credit score. But you have more options if you have good to excellent credit. If you aren’t in a rush, consider taking the time to improve your credit rating so you can get an even more favorable deal.

Frequently asked questions

It could be. In fact, consolidating your debt with a personal loan could improve your credit score if you need help managing your repayments. It could also give you more competitive rates and terms, especially if you have credit card debt.

Yes. When you apply for a personal loan, it temporarily hurts your credit score when a lender runs a hard credit check. However, it can improve your credit score if you make your repayments on time. If you’re late on repayments, it’ll damage your credit score.

Anna Serio is a staff writer untangling everything you need to know about personal loans, including student, car and business loans. She spent five years living in Beirut, where she was a news editor for The Daily Star and hung out with a lot of cats. She loves to eat, travel and save money.

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